Insurance organizations and roles

 Types of insurance organizations

actuaries	Calculates standard price of products, takes into account statistical data and past claims experience. Does overall financial assessment of the insurance company from time to time. Ensures the company has sufficient reserves to pay for future liabilities.
Third party administrators (TPAs)	Build hospital networks, helps in –approvals for cashless admission to a hospital –setting the bill with the insurer on discharge
Loss adjusters/surveyors	Assess and certify a loss when a claim is made on the insurance company. Play a major role in non-life insurance business.
The regulator(the insurance regulatory and development authority-IRDA)	Smooth running of the insurance sector. Grants licenses. Ensures compliance with the regulations at all times. Responsibility to protect the interests of the small policyholders against the mighty insurance companies.
Training institutes	Supply trained manpower. Premier training institutes -the insurance institute of India (III) -insurance institute of risk management (IIRM) -national insurance academy (NIA)
Non-governmental Organisations (NGOs)-	Protect customers’ rights. spread awareness about   insurance products work with self help groups (SHGs) and insurance companies in rural areas for penetration of micro-insurance products

Benefits of a professional insurance market

v Need based Selling

Ø Ensures that customer gets what he is looking for rather than what the company wants to sell.

v Disclosure

Ø All the relevant information about the product needs to be disclosed to the customer.

v Benefits to customer of a professional insurance market:

Ø Higher confidence among policy holder Increase in insurance penetration.

Ø Social benefits.

Ø  Employment generation.

Ø Increase in profit for insurance company.

History of insurance

The history of insurance in India can be divided into there phases

    Ø The first phase (pre-liberalization)  was dominated by private and foreign insurance companies before the government nationalized the sector in 1986.

    Ø In the second phase (liberalization) reforms were initiated and IRDA set up as the regulator of the insurance sector.  Private participation was invited and also FDI.

    Ø In the third phase (post-liberalization) many private companies started insurance operations with a foreign partner in  joint ventures. Currently there are 23 life insurance companies operating in India .

Role of financial services and insurance

v  The financial service sector has a major role to play In the overall economic growth of the country

v  The insurance sector can provide investment to companies and projects thanks to the money  invested in the insurer by individuals buying protection and investment products

Insurable vs. Uninsurable Risks

                                                         Not every negative economic event is insurable. For risk pooling to be effective, the risk should be unforeseen and infrequent. If a negative event can be predicted in a certain case, it's not a risk, but certainty -- and certainties are not insurable (with the possible exception of death, which is insurable because its timing is uncertain). Furthermore, if a risk is too frequent, it cannot meaningfully be transferred to an insurance company, since the insurance company would only pass on the cost of the negative occurrence to the pool of insureds, along with their expenses and profits. If nearly everyone in a risk pool is filing a claim, then they are likely better off not attempting to pool their risks at all but setting aside sufficient reserves to pay for them themselves.